Poor patients in Vietnam and other developing countries could suffer a significant hike in the price of medicine brought on by a regional trade pact that has been impossible to track.
The latest round of negotiations for the 12-nation Trans-Pacific Partnership (TPP) wrapped up Monday in Australia with a sunny joint statement issued by high-ranking trade officials noting “significant progress.”
But soon afterward, Reuters reported that “no breakthrough was forthcoming on the thorniest questions.”
"There is no prospect for an agreement on market access (between Japan and the United States) at the moment," Japanese Economics Minister Akira Amari was quoted by the newswire as telling a news conference in Sydney on Monday.
American political wonks note that congressional Democrats view approval of another free trade agreement as political suicide—a position that became poignantly public when Democratic Senate Majority Leader Harry Reid denied President Barack Obama the ability to fast track the deal in January.
If that were not tough enough, Obama's Republican opposition seems unlikely to consider such a deal until after the upcoming mid-term elections—making the earliest politically feasible window for its passage the third quarter of 2015.
In the meantime, some believe it is simply dead in the water. Others are optimistic that negotiations will smooth out the rough edges and it will pass like a stone through a river.
Such analysts hope that the natural give and take will eliminate the most unpalatable demands, including attempts to hand US corporations further control over the development of cheap drugs.
Most believe Vietnam will sign off on whatever TPP deal they are offered sheerly for the unfettered access to consumer markets and a chance to move its economy further away from dependence on China.
However, Reuters reported that one of the biggest hurdles remains intellectual property rights, particularly for products like pharmaceuticals.
US Trade Representative Michael Froman (R) speaks with Vietnam's representative Tran Quoc Khanhat (L) following a news conference at the Trans Pacific Partnership (TPP) meeting of trade representatives in Sydney October 27, 2014. Photo credit: Reuters
Going to bat for Big Pharma
According to documents released by WikiLeaks, America's TPP negotiators have spent years pushing to obtain measures that would, in effect, constrain affordable access to life-saving drugs through the pact.
The most recent document, released on October 16, detailed ways in which the US had asked signatories to the treaty to honor US drug patents and marketing monopolies for even longer than many already do.
In a document WikiLeaks described, in May 2014, as the latest draft of the intellectual property chapter of the TPP, the Office of the US Trade Representative proposed a long automatic monopoly period (e.g. “market exclusivity”) for all new biologic drugs.
Biologics are drugs derived from living organisms or engineered proteins—they include everything from simple vaccines to the latest and most effective treatments for cancer.
Market exclusivity differs from a patent in that it grants a brand-name company a monopoly for an allotted time after its product has received marketing approval from something like the US Food and Drug Administration.
During this period, drug regulatory authorities cannot approve a competing product for market entry.
“The text reveals that the US is still insisting upon extension of data exclusivity for 8-12 years on biologic drugs,” said Patricia Ranald, coordinator of the Australian Fair Trade and Investment Network.
Data exclusivity delays the development of generic drugs even further by requiring competing manufacturers to submit their own costly research and clinical trials before winning approval to market a competitive drug.
Health activists argue that these mechanisms inhibit the development of affordable cancer treatments, particularly in developing countries like Vietnam, where the average person earns less than $15 a day.
Katherine Pfaff, a spokeswoman for the US State Department, declined to comment on “information from allegedly leaked diplomatic cables,” citing policy.
However, others believe their authenticity is relevant.
“The US has publicly stated that it is seeking a 12 year exclusivity period for biologics, consistent with current federal law. The leaked information appears consistent with this position,” Sharon Treat, a Maine State Representative and executive director of the National Legislative Association on Prescription Drug Prices, told Thanh Nien News.
Treat pointed out that many in the US who have worked to expand access to affordable health care do not support lengthy exclusivity periods.
The US is the only country in the world to provide a special, extra-long period of market exclusivity for biologics. As a result, more affordable generics are blocked from market entry for twelve years, costing Americans billions of dollars in extra healthcare costs annually.
Even President Obama supports no more than a 7-year exclusivity period, Treat said.
“US state legislators such as myself have serious concerns about even a 7-year exclusivity period, because biologics are a growing and pricey share of the drugs purchased by individuals as well as government programs, and we worry that these provisions will increase health care costs exponentially, ultimately reducing access to health care and making health insurance – including insurance provided through the Affordable Care Act (“Obamacare”) - simply unaffordable,” she said.
The Office of the US Trade Representative (USTR) did not respond to Thanh Nien News's repeated requests for comment, but a spokesman was quoted by Reuters as cautioning against drawing conclusions based on "supposed leaked text from unnamed sources that does not reflect the current state of the negotiation."
Many in the pro-TPP camp see the pact as key to ensuring the US will continue to write the rules for trade in the Asia-Pacific region and stay central to the global economy at a time when many are organizing their manufacturing, agriculture, and service sectors around China.
Proponents say the TPP will create a free-trade zone stretching from Australia to Peru with $28 trillion in economic output, or 39 percent of total global trade, according to a recent Bloomberg story.
If passed, the TPP will closely link the economies of the US, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.
But the trade deal comes at a time when Vietnam, a country of 90 million, is suffering from dramatic rises in cancer rates.
At a conference held on October 18, health experts said the number of patients contracting certain types of cancers has doubled or even quadrupled over the past decade.
Cancer patients are also getting increasingly younger, they noted.
Vietnam logs around 150,000 new cases of cancer annually, more than half of which prove fatal, according to figures released by the World Health Organization (WHO) at the conference. At least 50 percent fail to seek timely treatment--many because they cannot afford to do so.
But Nguyen Chan Hung, a prominent doctor who chairs the Vietnam Cancer Society, disputed the WHO figures on cancer cases in Vietnam.
“According to my calculation, there are up to 85,000 cancer-related fatalities every year in Vietnam,” Hung said.
Patients wait for health check at the Tumor Hospital, a major cancer treatment facility in Ho Chi Minh City. Photo: Thanh Tung
The USTR office has maintained there is a need for tough patent standards to "incentivize" innovation at drug companies.
US pharmaceutical companies back this view, saying the American patent regime fosters useful medical innovation.
“Countries that enter these agreements decided that it was important to have a forward-looking high standard agreement that highlights the need to encourage innovative research,” said Mark Grayson, a spokesman for the Pharmaceutical Research and Manufacturers of America (PhRMA), an influential drug industry lobbying group
“With these innovations we will come up with new medicines that will treat patients everywhere. Without new treatments, there will never be generics,” he said.
But activists reject this logic, pointing to plenty of data that suggest otherwise.
“There is growing evidence the US IP-based incentive system for pharmaceutical innovation is broken. Fewer truly new and therapeutically important medicines are being invented as drug companies instead try to game the patent system to extend patent monopolies on existing medicines,” said Brook Baker, an expert at the US-based Health Global Access Project (GAP).
A 2008 research paper titled "The Cost of Pushing Pills: A New Estimate of Pharmaceutical Promotion Expenditures in the United States" confirmed that pharmaceuticals spend about twice as much money marketing their drugs as they do on researching and developing them.
Much of the research drug companies do is simply not relevant to public health concerns, the Huffington Post reported in 2011. Money pours into projects to reverse hair loss, for instance, while funding for curing diseases that mainly affect the poor, like tuberculosis, is in perpetual short supply, it said.
Activists point out that, of all the potential TPP signatories, Vietnam has the lowest per capita income and thus faces the greatest development challenges. Oxfam, an international anti-poverty group, warned that thousands more Vietnamese could be pushed into poverty since they will have to choose between medicines and other basic necessities.
“Although Vietnam is developing rapidly, its economic development is primarily benefiting elites and select sectors,” Baker said.
“Adopting heightened intellectual property burdens to gain temporary, short-term trade advantages for certain selectors is irresponsible public policy and goes against social solidarity for current and future generations.”
President Obama is seeking a final announcement on the TPP on November 11, when he will join other TPP heads of state at a regional summit in China next week.
Though Vietnam has objected to the US demands on medicine prices, the country’s top echelons have expressed high hopes for the TPP, which some believe will provide leverage against China's outsized economic influence.
“The government has continued to push for negotiations on both multilateral and bilateral free trade agreements,” Prime Minister Nguyen Tan Dung told the National Assembly, Vietnam’s legislature, at its opening session on October 20.
In Vietnam, claims of the TPP’s benefits have overshadowed concerns about its drawbacks, though the details of the pact remain secret.
Vietnam (and Tunisia) topped a recent international Pew Research Center survey that sought to gauge positive views of the benefits of growing global trade.
Both countries reported a 95 percent approval rating for trade. Respondents from the two biggest TPP economies showed little enthusiasm: the US came in 40th and Japan, 36th, in the survey of 44 countries
Hung, the leading Vietnamese cancer expert, declined to comment on the TPP's potential impact on medicine prices, citing a “lack of information” about the issue.
‘They have to be secret’
US critics of the pact have lambasted the entire negotiation process as fundamentally undemocratic.
In an interview with Reuters in 2012, Ron Kirk, then-head of the USTR office, said he opposed making the text public because doing so could make the deal impossible to sign.
That same year, Kirk attacked a petition from 30 legal scholars calling for more transparency in the negotiating process as unfair.
“I am strongly offended by the assertion that our process has been non-transparent and lacked public participation,” Kirk wrote to infojustice.org, the group that compiled and sent the letter. “USTR has conducted in excess of 400 consultations with Congressional and private stakeholders on the TPP, including inviting stakeholders to all of the twelve negotiating rounds.”
That said, the USTR's tactics have continued to raise eyebrows on Capitol Hill.
On May 1, Senator Ron Wyden called for an end to the secrecy around the TPP during a crucial Senate Hearing.
Two weeks later, Senator Elizabeth Warren castigated the secretive nature of the pact during a speech at a function in Washington.
"From what I hear, Wall Street, pharmaceuticals, telecom, big polluters and outsourcers are all salivating at the chance to rig the deal in the upcoming trade talks. So the question is: Why are the trade talks secret? You’ll love this answer,” Warren said.
“Boy, the things you learn on Capitol Hill. I actually have had supporters of the deal say to me, 'They have to be secret, because if the American people knew what was actually in them, they would be opposed.'"
(CALVIN GODFREY contributed to this report)